Global shares, US yields rise after strong jobs data, debt-ceiling passage

© Reuters. FILE PHOTO: An electronic board shows stock indexes at the Lujiazui financial district in Shanghai, China, March 21, 2023. REUTERS/Aly Song

By Chibuike Oguh

NEW YORK (Reuters) -Global shares and U.S. Treasury yields rose on Friday following stronger-than-expected job growth data that raised investor expectations that the Federal Reserve could retain its interest rate hikes.

Labor Department data showed on Friday that the U.S. economy added 339,000 jobs last month, significantly higher than most estimates and suggesting tighter labor market conditions which might prompt a Fed rate hike.

The market mood was also supported by the U.S. Senate passing bipartisan legislation on Thursday that lifted the federal government's $31.4 trillion debt ceiling and averted what would have been a first-ever default. The bill, which had been passed by the House of Representatives on Wednesday, heads to President Joe Biden, who is expected to sign it.

"We are of the view that the Fed will keep interest rates steady until sometime next year," said Tom Plumb, portfolio manager at Plumb Balanced Fund, adding that the U.S. economy is much stronger than most people realize.

The MSCI world equity index, which tracks shares in almost 50 countries, was up 1.52%. The pan-European STOXX 600 index (.STOXX) rose 1.21%.

On Wall Street, all three main indexes ended higher, led by gains in financials, industrials, consumer discretionary, technology and healthcare stocks.

The Dow Jones Industrial Average rose 2.12% to 33,762.76, the S&P 500 gained 1.45% to 4,282.37 and the Nasdaq Composite added 1.07% to 13,240.77.

U.S. Treasury yields were higher as investors bet on a possible increase in rates although many believe the Fed is likely to stick with a pause in hikes when it meets later this month. Benchmark 10-year notes were up at 3.695%, while yields on the more rate-sensitive 2-year notes rose to 4.509%.

The U.S. dollar edged higher in choppy trading after the strong job growth data. The dollar index rose 0.483%, with the euro dropping 0.5% to $1.0707.

Oil prices gained more than 2% on Friday as attention turned to a meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies this weekend.

Brent futures rose 2.5% to settle at $76.13 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 2.3% to $71.74.

Gold prices slipped as the U.S. dollar rose. Spot gold dropped 1.5% to $1,948.11 an ounce, while U.S. gold futures fell 1.55% to $1,947.40 an ounce.